TaxTMI 
TaxTMI 
2026 (4) TMI 409
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....250 of the Income Tax Act, 1961 (hereinafter called 'the Act'). The relevant Assessment Year is 2010-11. 2. The grounds raised by the Revenue reads as follows:- 1. The Ld. CIT(A) erred in law and on facts in allowing exemption under Section 11(1)(d) of the Income-tax Act, 1961 on the alleged corpus donations despite the absence of any enabling clause in the Trust Deed that allows the Trust to collect corpus donations. 2. The Ld. CIT(A) failed to appreciate that the mere mention of the word "corpus" in the donor letters - particularly when the donors are related parties - is not sufficient to qualify the donations for exemption under Section 11(1)(d). 3. The Ld. CIT(A) erred in ignoring the fact that the Trust D....
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.....09.2010 and processed u/s. 143(1) of the Act. Subsequently, based on observations made during assessment proceedings for AY 2014- 15, the AO reopened the assessment for the impugned year vide notice dated 31.03.2017 on the ground that the trust deed did not contain any specific clause permitting receipt of corpus donations. 5. The AO, while completing the reassessment u/s. 143(3) read with section 147 of the Act vide order dated 29.12.2017, held that corpus donations are not eligible for exemption u/s. 11(1)(d) of the Act in the absence of an enabling clause in the trust deed and accordingly treated the same as income u/s. 11(1)(a) of the Act. Further, the AO held that the assessee had failed to comply with the requirements of Explanati....
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....mitting receipt of corpus donations. It was submitted that the law places emphasis on the intention of the donor and not on the contents of the trust deed. Reliance was placed on judicial precedents to contend that the character of a donation is determined solely by the donor's direction and neither the AO nor the assessee can alter such character. 9. The Ld. AR further submitted that the donor letters clearly indicate that the contributions were towards corpus and merely because a standard format was used stating that funds would be utilized in accordance with the trust deed, the same does not dilute the specific direction of the donor. It was also contended that the AO has not disputed the genuineness of the donations nor their applica....
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....ere was no fresh tangible material, rendering the reopening as a mere change of opinion. It was further submitted that the mandatory procedure laid down by the Hon'ble Supreme Court in the case of GKN Driveshafts (India) Ltd. reported in [2003] 259 ITR 19 (SC) was not followed, as no speaking order was passed disposing of the objections raised by the assessee. The Ld. AR also contended that no notice u/s. 143(2) was issued during the reassessment proceedings, which vitiates the entire assessment. In view of the above submissions, the Ld. AR prayed that the order of the FAA be upheld and the appeal filed by the Revenue be dismissed. 13. We have heard the rival submissions and perused the material available on record. The primary issue ari....
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....owards the corpus of the trust. The AO has not disputed the genuineness of these donations nor has he brought any material on record to demonstrate that such funds were not utilized in accordance with the objects of the trust. 15. The reasoning adopted by the AO that in the absence of a specific clause in the trust deed, corpus donations cannot be accepted as such, is not in consonance with the settled position of law. The character of a donation depends upon the intention of the donor, and once such intention is clearly expressed, the same cannot be disregarded. Therefore, we find no infirmity in the conclusion of the FAA that corpus donations received by the assessee are not liable to be treated as income u/s. 11(1)(a) of the Act. 1....